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What is the npv of project

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Your firm's geologist has discovered a small oilfield. It is forecasted to produce a cashflow of $2 million in the first year. The opportunity cost of projects with similar type of risk is 12%. What is the NPV of this project if the cash flows are expected to continue for 20 years. The cash flows are expected to increase by the annual inflation rate of 3%. The upfront development cost is $15 million.

Reference no: EM132999463

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